Up 14% in a month, why the ANZ share price can keep delivering: Citi

The top broker reckons it's time to load up on housing-related ASX shares.

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Key points

  • The ANZ share price is in the green this morning, breaching $26 per share for the first time since May
  • Citi says there is more growth to come for the ANZ share price 
  • The broker reckons it's time to load up on housing-related ASX shares 

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has risen strongly over the past month, up 13.66%.

The ANZ share price is in the green this morning, breaching $26 per share for the first time since May.

Top broker Citi reckons there is more growth ahead for the ANZ share price.

Why will the ANZ share price keep rising?

According to a report in The Australian today, top broker Citi thinks ASX shares related to housing are winners. The broker says ASX investors should "start to build positions now" in such companies.

The most obvious housing-related companies to invest in are ASX bank shares. This is because they are the biggest lenders to households and hold billions of dollars in mortgages on Australian property.

Citi expects the Reserve Bank of Australia to raise the official cash rate to a peak of 3.35% in early 2023. It expects an average fall in house prices of 23% from the peak to the trough — sometime late next year.

But here's the clincher for ASX investors.

Citi's own quantitative analysis indicates that housing-related shares tend to hit their floor six months before house prices.

They also begin to outperform the broader market about a year before the trough in house prices.

Citi says:

This suggests that investors should start to build positions now, with the added fillip near-term of several stock and sector nuances which underpin our view of more compelling value today.

These range from industry impacts like excess liquidity in banks and an elongated building cycle – to more stock specific (factors like) acquisitions.

Citi sees upside in the ANZ share price, along with the Westpac Banking Corp (ASX: WBC) share price.

The broker's other housing-related ASX share picks outside banking are Harvey Norman Holdings Limited (ASX: HVN), Nick Scali Limited (ASX: NCK), Mirvac Group (ASX: MGR), CSR Limited (ASX: CSR), Fletcher Building Limited (ASX: FBU), and BlueScope Steel Limited (ASX: BSL).

ANZ released its full-year results last week and declared a final dividend of 74 cents per share.

This was a 2.8% increase on the FY21 final dividend.

The ANZ share price currently offers a trailing grossed-up dividend of 8%.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has positions in Australia & New Zealand Banking Group Limited, Harvey Norman Holdings Ltd., Nick Scali Limited, and Westpac Banking Corporation. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman Holdings Ltd. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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